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Ramsey is Wrong! | My Money Track

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Ramsey is Wrong!

dave-ramseyC’mon man! Get real Dave. We baby boomers and generation x –ers all know you are a well publicized personal financial guru, and your basic mantra of spend less, pay off debt is marvelous. However, we think it’d be best if you stick-to-your-knitting and stop misleading people who invest in their 401k, IRA and Roth IRA. You website proclaims one should earn 12% per year on average in the US Stock market today. But the problem with “averages” are…

say a person is standing with one foot in a bucket of ice and the other foot in a pit of fire

Hypothetically and on “average,” that person would be fine. The road to financial ruin is littered with the carcasses of investors who relied on Hypotheticals and “Average return “expectations.”

Why should Dave stop offering specific financial investment advice?

overcoming-disbeliefBecause Dave unapologetically says you can earn 12% in the us stock market today by investing in mutual funds! It is very unlikely that anyone today or in the foreseeable future will earn 12% annually in the stock market.  In fact, the Dow Jones today has plummeted again in 2016; China’s unraveling and the plummet in oil prices don’t appear to reversing anytime soon. Yet this is the return the Ramsey method and his website promote. Also, “one-size advice” rarely fits everyone in dealing with personal financial planning or investment advice. For example, the old school 1982 -2000 philosophy of “buy and hold” hasn’t worked in the past fifteen years. We endearingly changed the term to Buy-and-hope.

The average annual price return in the S&P 500 index since 2000 has been less than 3%

(excluding dividends) Strong headwinds such as US National debt at nearly $20 trillion and the Fed raising interest rates will prohibit any sustainable rally in the stock market. Fears are growing that we may see a repeat of the 2008 financial crisis.

blog_ai_payday_loanWhat works in one type of U.S. economy (economic cycle) often doesn’t work in a different type of cycle.  Using history is a great teacher because it can repeat itself.  In fact, history and the general stock markets are repeating a cycle the nation went through between 1965 and 1982.  It took seventeen years for the buy and hope method to break even back then.

Granted over a very long time the general idea of owning stock in great companies that pay dividends is wonderful, if not naive.  But the first rule of getting out of debt and moving forward is never go backwards in you investments.  And the risk of doing exactly that today is too great, even with companies that pay a sweet, relatively fat dividend.

Don’t be a fool!  Anyone who implies, or worse (in Ramsey’s case on his website) that you should expect to earn 12% on average every year on your stock market investments are terribly misleading you.  Granted that if you invested in the stock market back in 1926 and were still invested today, then yes Virginia, you would have earned an average of nearly 12% each year; if one includes dividends being reinvested.  But let me reiterate again, that since Y2K (remember those Y2K scares?), the S&P 500 index has averaged an annual gain of less than 3%.

1930sAnd we are not living in the 1920’s… it is a very different world now than that which existed 90 years ago. In fact, the most recent 15-year period is vastly different from the previous 15 years.  Nobody can tell you a great mix for your investments without a very involved and detailed look into many facets of your finances.  And possibly the most important thing to know about “you” when charting your money plan is not financially related at all – it is how you deal with money, its rewards and setbacks, emotionally. Generally speaking…

it is emotions and not cerebral activity controlling most investment decisions.  

People tend to buy and sell investments when it feels good and thus typically do so at precisely the wrong time. What’s your next step?  Ask your friends – people who seem to be happy and content in their life, how they manage their money.  Seek out a local Dallas or Ft. Worth professional you can relate to and get your best advice and help for your financial future.

Creative ThinkingThink outside the proverbial box and forget about labels, certifications, degrees and pompous education credentials.  That entire minutia is meaningless if you cannot communicate and trust completely in the best financial advisor you select.  Seek experience – someone who has survived crashes and financial tumult.  Look for a personality fit as well as open, solid communication skills.

Another best practice is to follow how the wealthy and influential stalwarts of money invest their own hard-earned money. Consider the likes of Ben Bernanke, Suzy Orman, Tony Robbins and Ben Stein who all go against the Wall Street fat cats and their self-serving investment recommendations. You can view their investments on our website by clicking here.

Check out the new secret strategies that have proven to be successful by clicking here:

Ignore the egocentric talking heads on CNBC who perversely spout the BS their Wall Street sponsors feed to them. Click on Cramer below to view his worst call ever!

Michael Ham and My Money Track will happily provide you with the information and education materials that will make your life much better. What you really need is a guaranteed lifetime income stream; one you can rely upon forever. Believe it or not, your best investment just may be your best annuity (blasphemy!)

If you do not have the best financial advisor, consider giving us a call. And if you do already work with a professional expert, we are happy to give you our information free of charge.

In the end, it’s your money and you get to decide how you want to manage it.


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